Tag Archives: credit rating agencies

I’ve now been writing this blog for just about two years, and this will be my 200th post. Being something of an anniversary then, I’ve been wondering how to mark the occasion. How about some kind of a retrospective, for instance… reviewing my earlier reports on the decline of the world’s economy as an inevitable consequence of systemic fraud and failure; or the rise of the surveillance state with the introduction of fingerprinting of kids in Britain and of drones over America; or the serious environmental threat from nuclear power and fracking (this ultra-destructive ‘technology’ coming to Britain almost immediately after I first heard and wrote about it!); mixed in perhaps with another reminder of how the neo-imperialist wars of the twenty-first century are being expanded into Africa and why the civil war in Syria is really just a proxy war with the al-Qaeda-led rebel forces being covertly supported by their own sworn enemy, America. (To read posts on any of the above just follow the relevant links from the main menu or use the search tool.)

However, to do justice to such a monumental post would possibly have taken a month or more. All the troubles I have written about, and sadly with very few exceptions, worsening during the past two years; our descent into chaos and tyranny happening quicker now than before I began.

More wars; more environmental devastation in the name of environmental protection; greater infringement of our civil liberties and human rights; and an economy that is teetering on the very edge of total collapse. Indeed, the economic situation is now so bad that on BBC2’s Newsnight a few nights ago [Tuesday 19th], Jeremy Paxman was reduced to interrogating an MP from Cyprus. And just think about that for a moment, and bear in mind that Cyprus (and I mean no offence to Cypriots when I say this) is an economic gnat. Yet we are seriously contemplating how the effects of a debt problem in Cyprus might undo the entire Eurozone. All of which is actually a measure of how broken the banking system has become.

Yes, the financial system of much of the world (and especially our region of it) is bankrupt, and has been for some time. The reason is the multiple hundreds of trillions of dollars of so-called ‘toxic’ derivatives that have still yet to be deleted. But instead of cancelling the odious debts and prosecuting a corrupt banking establishment, the proposed solution is instead to openly steal money from personal bank accounts in order to keep the Ponzi scheme up and running just a little longer. This brazen theft being described in places like the BBC as “a haircut” or “a tax on savings”. You just can’t make it up any more! And sooner or later, we must expect that all of this will be coming to a bank nearby…

Those who have listened carefully to people really in the know, like former regulator William K Black, are aware not only of the real cause of this crisis (and the resulting depression which the mainstream media have also helped to play down) but also precisely who is really to blame – and let’s name names here: hands up Moody’s, Standard & Poor’s, and Fitch! The three credit rating agencies who gave triple-A’s to toxic trash on the basis of mere opinion and yet continue to downgrade the credit worthiness of nation states in a deepening crisis which they were instrumental in starting… you really can’t make this up! And hands up Goldman Sachs, J.P Morgan, Citibank, Barclays, HSBC, and all the cronies in government, at the ECB, the Bank of England, the Federal Reserve, the IMF, and not forgetting the FSA and other supposed “regulatory agencies”. Agencies working for whom and to what ends, we may all reasonably demand.

It is the greed, incompetence and malfeasance across the whole of the financial sector that has brought us to this brink. It was never the fault of “the lazy Greeks” and it’s not the fault of pesky Cypriots either, but the mainstream media still hesitates at telling the people the truth – and why? Just how deep does the cronyism run…?

I hate to say this but quite frankly our world, by which I mean our civilisation, is going to hell in a handbasket. Because just as our economies collapse, and the social structures we rely upon follow, at very same time the controls on us are being tightened one notch at a time, and at an accelerating rate. This is another big theme I have returned to time and again. How in America there was Obama’s introduction of the NDAA “indefinite detention act”, and how in Britain we look set to get our own secret trials too. How in America (and most probably in Britain, although here the available evidence is less certain) there is already universal surveillance of internet activity and soon (certainly if Obama gets his way) of bank accounts too.1

These are the considered thoughts of veteran investigative journalist John Pilger, writing almost a year ago an article on his own website entitled “You are all suspects now. What are you going to do about it?”:

You are all potential terrorists. It matters not that you live in Britain, the United States, Australia or the Middle East. Citizenship is effectively abolished. Turn on your computer and the US Department of Homeland Security’s National Operations Center may monitor whether you are typing not merely “al-Qaeda”, but “exercise”, “drill”, “wave”, “initiative” and “organisation”: all proscribed words. The British government’s announcement that it intends to spy on every email and phone call is old hat. The satellite vacuum cleaner known as Echelon has been doing this for years. What has changed is that a state of permanent war has been launched by the United States and a police state is consuming western democracy.

What are you going to do about it?

In Britain, on instructions from the CIA, secret courts are to deal with “terror suspects”. Habeas Corpus is dying. The European Court of Human Rights has ruled that five men, including three British citizens, can be extradited to the US even though none except one has been charged with a crime. All have been imprisoned for years under the 2003 US/UK Extradition Treaty which was signed one month after the criminal invasion of Iraq. The European Court had condemned the treaty as likely to lead to “cruel and unusual punishment”. One of the men, Babar Ahmad, was awarded 63,000 pounds compensation for 73 recorded injuries he sustained in the custody of the Metropolitan Police. Sexual abuse, the signature of fascism, was high on the list. Another man is a schizophrenic who has suffered a complete mental collapse and is in Broadmoor secure hospital; another is a suicide risk. To the Land of the Free, they go – along with young Richard O’Dwyer, who faces 10 years in shackles and an orange jump suit because he allegedly infringed US copyright on the internet. 2

Meanwhile, of course, the neo-imperialist adventuring remains not only unchecked, but is actually gathering momentum. The war racket pressing full-steam ahead and flattening all before it. It doesn’t matter that we don’t have money to fix our broken hospitals, or to build houses and renew infrastructure, or that in America there are fifty million people already on food stamps – and if you picture those people in sepia forming a queue then you’ll see how this depression has already reached 1930s levels. But in spite of these hardships at home, no amount of money is ever spared when it comes the next country on our checklist for “humanitarian intervention” – and more thoughts on this in my next post.

So these days I am finding every post I write is harder than the last. How many ways are there to say that nuclear power and fracking are a menace not only to human beings but to most other life on the planet (cockroaches aside perhaps)? How many times do you need to say that “austerity measures” are not merely ideological in design but that they serve no useful purpose other than to wreck economies (as the IMF and World Bank have done in so many other countries across the globe) whilst redistributing wealth from the relatively poor to the mega-rich? How many times does it need pointing out that America is backing al-Qaeda when it suits their ends? – when, after all, al-Qaeda owes its origins to Zbigniew Brzezinski and the CIA and their dirty campaign to overthrow the Soviets in Afghanistan. So it is genuinely painful to have to repeat these things, and totally depressing to be shown to be right – that our collective future really is becoming so absolutely bleak, and unremittingly brutalised. Sooner rather than later, I want to be proved wrong – this hope is the only thing that actually keeps me writing this damned blog.

Now if any of the above sounds to you like craziness, then let me confirm that on one level it really is, though the craziness is not mine. For, in a sense, this is simply the way things have always worked: policies of expedience, of realpolitik. It is how ruling elites prefer to govern the masses, and all that stuff and nonsense about “freedom and democracy” and “saving the planet” is for the proles and “the gentlemen” (as neo-con political philosopher Leo Strauss called them) – those in the higher-up echelons who truly believe in the goodness of the system, but whose real job is to protect the interests of the powers that be. But the difference now is that the ruling elites are ready to assume a more complete dominion over all of their underlings. And it will be achieved by a scientifically-driven programme of social engineering that is already well underway: bringing us into the scientific dictatorship that globalist bigwig Zbigniew Brzezinski famously called “the Technetronic Era”:

“In the Technetronic society the trend seems to be toward aggregating the individual support of millions of unorganized citizens, who are easily within the reach of magnetic and attractive personalities, and effectively exploiting the latest communication techniques to manipulate emotion and control reason.” [..]

“Another threat, less overt but no less basic, confronts liberal democracy. More directly linked to the impact of technology, it involves the gradual appearance of a more controlled and directed society. Such a society would be dominated by an elite whose claim to political power would rest on allegedly superior scientific knowhow. Unhindered by the restraints of traditional liberal values, this elite would not hesitate to achieve its political ends by using the latest modern techniques for influencing public behavior and keeping society under close surveillance and control.” 3

Do Brzezinski’s words represent a warning or a blueprint… this ambiguity remains only because Brzezinski quite deliberately never makes his position clear:

The Technetronic age is that which is created by the (theoretical) Technetronic Revolution. It is always fairly ambiguously presented as to whether Brzezinski is actually predicting this revolution based on observation/trends, or whether he is abstractly philosophizing. It certainly is not a work of political science. With this in mind, his concluding line in the book, ‘In the technetronic era, philosophy and politics will be crucial’ serve to confuse the reader further rather than give some closure. 4

The quote above is taken from a rather favourable review of Brzezinski’s book written by Stephen McGlinchey in 2011. The book itself has been out of print for three decades.

There is plenty of speculation about Brzezinski’s real intent when he wrote the book, but does this even matter – especially as we have good reasons to be suspicious given his record in other more tangible ways – the more important point is that the direction he outlines is evidently the direction our world has taken. And I would like to think that my own ant-sized efforts to halt the progress of this imposed revolution, alongside the efforts of countless other out-spoken ants, all trying so hard to speak up with truth to power is having some effect. That we may be small and struggling to be heard above the largely controlled, mainstream din, with tiny readerships and such small spheres of influence, but that our combining ripples are building in amplitude and spreading wider…. And then I read an article and I think that yes indeed, tiny as we are, we really must be having some effect, because it seems that the government is suddenly intent on shutting voices like mine down altogether.

Never letting any good crisis go to waste, the government it seems has twisted the whole Leveson Inquiry around to its own advantage – in a fashion reminiscent of what happened with the Hutton Inquiry (from which, of course, the BBC has never properly recovered). The Leveson Inquiry, we should remember, was set up to deal with crimes, and specifically the crime of phone hacking, perpetrated by media giants (most prominently Rupert Murdoch’s News International), and to also look into the role played by the London Metropolitan Police, yet in consequence, the results of that inquiry look likely to close down parts of the alternative media instead. Here’s an extract from Tuesday’s Guardian:

Bloggers could face high fines for libel under the new Leveson deal with exemplary damages imposed if they don’t sign up to the new regulator, it was claimed on Tuesday.

Under clause 29 introduced to the crime and courts bill in the Commons on Monday night, the definition of “relevant” bloggers or websites includes any that generate news material where there is an editorial structure giving someone control over publication. […]

Kirsty Hughes, the chief executive of Index on Censorship, which campaigns for press freedom around the world, said it was a “sad day” for British democracy. “This will undoubtedly have a chilling effect on everyday people’s web use,” she said.

She said she feared thousands of websites could fall under the definition of a “relevant publisher” in clause 29.

Hughes said: “Bloggers could find themselves subject to exemplary damages, due to the fact that they were not part of a regulator that was not intended for them in the first place.” 5

My belief has always been (and remains) that the best way to lose your freedom of speech is by refusing to use it, and so this ludicrous regulatory overreach is more reason to keep offering some small alternative to the mainstream behemoths. And rest assured that I certainly won’t be signing up to any regulatory body.

Finally then, and if the authorities ever do decide to go after me for daring to disagree with mainstream authority, then I ask in advance for your support – why? Because I’m the little guy, the ant, the gnat, the gadfly. The main difference between you and I, in this respect, is merely that I have perhaps put my head a little higher above the parapet. So once I’m firmly in the cross-hairs, assuming this should happen, then you can be absolutely certain it’ll be your turn next, and rather sooner than you might suppose…

1“The Obama administration is drawing up plans to give all U.S. spy agencies full access to a massive database that contains financial data on American citizens and others who bank in the country, according to a Treasury Department document seen by Reuters.

“The proposed plan represents a major step by U.S. intelligence agencies to spot and track down terrorist networks and crime syndicates by bringing together financial databanks, criminal records and military intelligence. The plan, which legal experts say is permissible under U.S. law, is nonetheless likely to trigger intense criticism from privacy advocates.”

As the mainstream media focuses on the economic collapse in Europe, especially on today’s credit rating attack on France, there are also hugely significant events taking place in America that are receiving next to no coverage.

It is less than a fortnight since Obama signed the NDAA 2012 which opened the door for indefinite detention without trial of those ‘suspected’ of ‘association’ with ‘terrorist groups’. Now that clampdown on freedom looks set to tighten further, the likelihood growing that these new ‘anti-terror’ measures, which are in clear breach of The Constitution, could soon be used against ordinary American citizens:

When Barack Obama inked the National Defense Authorization Act on New Year’s Eve, the president insisted that he wouldn’t use the terrifying legislation against American citizens. Another new law, however, could easily change all of that.

If the Enemy Expatriation Act passes in its current form, the legislation will let the government strike away citizenship for anyone engaged in hostilities, or supporting hostilities, against the United States. The law itself is rather brief, but in just a few words it warrants the US government to strip nationality status from anyone they identify as a threat.

What’s more, the government can decide to do so without bringing the suspected troublemaker before a court of law.

A summary and the full text of H.R. 3166: Enemy Expatriation Act can be found on GovTrack.

The group Anonymous have already issued a statement against the new act:

THE ENEMY EXPATRIATION ACT – A STATEMENT FROM ANONYMOUS

H.R. 3166: Enemy Expatriation Act (#EEA)

The Enemy Expatriation Act is yet another treasonous bill similar to the National Defense Authorization Act that was signed into law by President Obama on New Years’ Eve. The NDAA, which authorizes the indefinite detention of American citizens on U.S. soil, was met with outrage from the American public. The media largely refused to cover the NDAA until it was too late, and the bill had been signed into law. We are now faced with a similar situation. The Enemy Expatriation Act has been introduced in the House, and again, the media refuses to cover it. The American public have the right to know about a bill that could revoke their United States citizenship, and the continuing media blackout poses a serious threat to the freedoms this country pledges to provide its citizens. […]

In order to stop the Enemy Expatriation Act and all future acts of the U.S. government which revoke our freedoms and attempt to shred the last remnants of our Constitution, it begins with you – with all of us. The media refuses to provide us with the information we need to play a part in our own futures. The government refuses to allow any consideration of the direction we, the people, wish for this country to go. We must be the ones to inform the people. We must play an active role in our future. We are trained to be divided by the media, by the government, told that it’s all about petty issues when it’s not. Occupiers, Tea Partiers, Democrats, Republicans, Independents, this is not a partisan issue. The issue at hand is our future, and the reality of the present is that the government is slowly revoking our freedoms and our voice. Inform everyone you know about these acts of Congress, and the government as a whole. Make sure they are getting the information they NEED, and not just what they want us to know. Knowledge is power, and the freedom of information is the key to uniting all of us around the issues that really matter. Spread this message to everyone you know. Speak out against these acts, contact your representatives, senators, congressmen and make sure that they know that these injustices will not be tolerated. United, we will restore the power back to the People.

William Black, Associate Professor of Economics and Law at the University of Missouri-Kansas City, is a former financial regulator and a white-collar criminologist, who helped to expose Congressional corruption during the Savings and Loan Crisis in the late 1980s, by accusing then-house speaker Jim Wright and five US Senators, subsequently known as the Keating Five (who included John Glenn and John McCain), of doing favors for the S&L’s in exchange for contributions and other kickbacks. Although the senators only received a slap on the wrist, Charles Keating — after whom the so-called “Keating Five” were named — had sent a memo that read, in part, “get Black — kill him dead.”

Based on his experiences, Black wrote a book entitled: “The Best Way to Rob a Bank is to Own One.”

In April 2009, William Black was interviewed by Bill Moyers on PBS. He explained how the banks and the credit ratings agencies were together committing fraud, with the result that the financial system “became a Ponzi scheme”:

BILL MOYERS:So if your assumption is correct, your evidence is sound, the bank, the lending company, created a fraud. And the ratings agency that is supposed to test the value of these assets knowingly entered into the fraud. Both parties are committing fraud by intention.

WILLIAM K. BLACK:Right, and the investment banker that — we call it pooling — puts together these bad mortgages, these liars’ loans, and creates the toxic waste of these derivatives. All of them do that. And then they sell it to the world and the world just thinks because it has a triple-A rating it must actually be safe. Well, instead, there are 60 and 80 percent losses on these things, because of course they, in reality, are toxic waste.

BILL MOYERS:You’re describing what Bernie Madoff did to a limited number of people. But you’re saying it’s systemic, a systemic Ponzi scheme.

WILLIAM K. BLACK:Oh, Bernie was a piker. He doesn’t even get into the front ranks of a Ponzi scheme…

BILL MOYERS:But you’re saying our system became a Ponzi scheme.

WILLIAM K. BLACK:Our system…

BILL MOYERS:Our financial system…

WILLIAM K. BLACK:Became a Ponzi scheme. Everybody was buying a pig in the poke. But they were buying a pig in the poke with a pretty pink ribbon, and the pink ribbon said, “Triple-A.”

He also pointed out that the policies of Obama administration remained in violation of the law:

BILL MOYERS:Yeah. Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?

WILLIAM K. BLACK:Absolutely.

BILL MOYERS:You are.

WILLIAM K. BLACK:Absolutely, because they are scared to death. All right? They’re scared to death of a collapse. They’re afraid that if they admit the truth, that many of the large banks are insolvent. They think Americans are a bunch of cowards, and that we’ll run screaming to the exits. And we won’t rely on deposit insurance. And, by the way, you can rely on deposit insurance. And it’s foolishness. All right? Now, it may be worse than that. You can impute more cynical motives. But I think they are sincerely just panicked about, “We just can’t let the big banks fail.” That’s wrong.

Two and a half years on, William Black says on Democracy Now! that nothing has changed:

AMY GOODMAN:What do you think has to happen now? And what does this have to do with the Occupy Wall Street protests that have expanded here in Kansas City and across the globe? There are more than a thousand demonstrations that have been held in the last weeks.

WILLIAM BLACK:Well, we have companion problems. We’ve got to stop this dynamic that’s producing recurrent, intensifying crises. I mean, this one has devastated the nation. The next one would probably be equivalent to the Great Depression. And part of that answer—but only part of it—is to hold the folks accountable, especially the most elite, who caused this crisis. And they did it through fraud, and they did it through fraud in what we call the “C-suites” —the CEOs, the COOs — so, the absolute top.

AMY GOODMAN:And how would these powerful financial entities be held accountable? What exactly should happen?

WILLIAM BLACK:It all starts with the regulators, which is why it’s all not started here, because we have, of course, the wrecking crew, Bush’s wrecking crew, what Tom Frank called them, in charge, and they stopped making criminal referrals. So our agency, in the savings and loan crisis, made over 10,000 criminal referrals to the FBI. That same agency, in this crisis, made zero criminal referrals. If you don’t get people pointing the way and pointing to the top of the organization, you don’t get effective prosecutions. So, in the peak of the savings and loan crisis, we had a thousand FBI agents. This crisis has losses 70 times larger than the savings and loan crisis. And the savings and loan crisis, when it happened, was considered the largest financial scandal in U.S. history. So we’re now 70 times worse. And as recently as 2007, we had 120 FBI agents—one-eighth as many FBI agents for a crisis 70 times larger. And they looked not at the big folks, but almost exclusively at the little folks.

AMY GOODMAN:William Black, you mentioned Bush’s wrecking crew, but we live in the time of President Obama.

WILLIAM BLACK:And we’ve been living for some years in the time of President Obama, and he has done absolutely nothing to reestablish the criminal referral process. And as a result, there are virtually no prosecutions of any elites.

He was also asked about what the message from Occupy Wall Street should be:

Well, first, of course, I don’t speak for that movement, and indeed they don’t have official spokespersons with clear plans. So that part is true. They think of that as one of the great strengths of democracy now, right? That things bubble up, and they have different ideas. However, if you look, not just nationwide, but worldwide, you will see some pretty consistent themes developing.

And those themes include: we have to deal with the systemically dangerous institutions, the 20 biggest banks that the administration is saying are ticking time bombs, that as soon as one of them fails, we go back into a global crisis. Well, we should fix that. Right? There’s no reason to have institutions that large. That’s a theme.

That accountability is a theme, that we should keep—put these felons in prison, and there’s no action on that.

That we should get jobs now, and that we should deal with the foreclosure crisis. So those are four very common themes that you can see in virtually any of these protest sites. And they have asked me, for example, to come to New York to talk about some of these things. So, I think, over time, you won’t necessarily have some grand written agenda, but you’ll have, as I say, increasing consensus. And it’s a very broad consensus. It’s not left, it’s not right; it’s not Republican, it’s not Democrat.

For a refreshingly frank and insightful examination of the reasons for the current global economic crisis, and, more specifically, of the IMF’s part in our accelerating downfall, I recommend the following programme:

Empire: The IMF on trial

broadcast on Al Jazeera on Thursday 11th August at 9:00pm–10:00pm

Presenter Marwan Bishara leads a searching debate into the historic failures of the IMF, with reflections on the legacy of its intervention in Latin America — most especially in Argentina — as well as in East Asia and Africa. There is also speculation about what is likely to happen to Egypt, after calls for IMF intervention were declined, and to Greece, where the imposition of “austerity measures” is already in full swing.

The guests are:Professor Alex Callinicos, director of European Studies, King’s College London and author of “Bonfire Of Illusions”.

Ann Pettifor, fellow, at the New Economics Foundation and author of “The Coming First World Debt Crisis”

Georges Corm, former Lebanese finance minister and former special consultant, World Bank

There is no alternative (shortened as TINA) was one of Margaret Thatcher’s favourite slogans. Those who repeat this slogan today, do so in defence of the same neoliberal agenda that Thatcher’s policies first helped to establish during the 1980s. They believe that only the “freedom of the markets” is sacrosanct, and oblivious to the hardship and brutal oppression which such policies have brought to so many countries around the world, they stand firm in their conviction that we are living under the best of all possible economic orders. In this sense, they are fundamentalists. Whilst those who use it to defend calls for the latest round of “austerity measures” are also saying that making savage cuts to government spending is the only way to rescue ourselves in these times of economic crisis. That we must sacrifice everything in order to satisfy the market. Yet all of this is dependent upon accepting an ideology that refuses to admit it is an ideology, and all of this is socioeconomic nonsense.

A background to austerity

Inter-governmental institutions, such as the International Monetary Fund (IMF), have for many years demanded a commitment from governments of impoverished nations to accept the imposition of austerity measures in exchange for functioning as a lender of last resort. The terms for such IMF bailouts are technically known as “conditionalities”.

Conditionalities generally involve a number of requirements and some of these may indeed be beneficial. The IMF may, for example, insist upon anti-corruption measures. But mostly the IMF will insist upon “free market reforms”, which means, in short, a tough austerity package to dismantle the nation’s welfare system, with the forced privatisation of key public services, along with the imposition of “trade liberalisation” and deregulation. Under such a programme, with the country being required, in effect, to give up it economic sovereignty, it is suddenly open to vulture capitalism, and ready to be asset-stripped by global corporations.

This package of conditionalities, or “market-friendly policies”, was known as the Washington Consensus, although it might more aptly have been renamed the “Chicago Concensus” given that these rules for “economic reform” were predicated on the hardline neoliberal dogma developed by the Chicago School, and then first tested by the so-called Chicago Boys, who imposed them as economic “Shock Therapy” during the terrible years of the Pinochet dictatorship in Chile. In any case, the name Washington Consensus became so sullied that the IMF have dropped it altogether. But only the tone of the IMF has been softened, as the demands being made of Greece and Portugal now show. They are still in the business of dismantling welfare systems and the wholesale privatisation of nations.

The results of austerity

“The experience of austerity measures imposed on developing countries should sound alarm bells for us all. These measures are not a new innovation; they were cooked up by Thatcher and Reagan in the 1980s and forced onto developing countries by the IMF and World Bank. The effects were devastating: inequality, poverty and injustice increased as public services and welfare spending were slashed.

“Recently, such policies have been completely discredited; even the World Bank and IMF held their hands up and said they got it wrong. Countries, like Malaysia and Vietnam, that resisted the austerity measures remained far less vulnerable than those that had to succumb to these failed economic prescriptions. If we don’t resist this illogical thinking, the outcome will lead to a truly broken Britain.”

says Deborah Doane, director of the World Development Movement.

In the same article, which is entitled “Neoliberal policies have no place in the post-crash world”, Doane also gives a concise and well-informed overview of the effects of imposed austerity on the basis of recent historical cases.1

Why austerity cannot help us

“The deficit isn’t caused by profligate government spending to support an over-bloated welfare state, but by a massive bank bailout, shrinking government revenues, and a decline in corporate taxation. As in the developing world, maintaining public spending is what we need for long-term support to our economy, and to our populations.”

says Deborah Doane in the same article.

The maths is actually quite simple here. If you cut government spending, especially during times when the private sector economy is also struggling, then the knock-on effect is that tax revenues are reduced, and this then increases the deficit. The outcome being precisely the opposite to that demanded. But austerity isn’t simply doomed to failure, it is doomed to devastating failure. It leaves the country concerned with nothing but mass unemployment and even greater debts to repay.

Why we must fight this together

“For decades, Europe has been held up as a paragon for how social democracy can work, by providing free healthcare or education, and ensuring people have a high quality of life at the same time. The legacy of the Chicago School is invading this last battleground for social justice. Fighting the austerity agenda at home is a truly globally relevant campaign.”

says Deborah Doane in the same article.

It took a century for the people of Europe to win our economic rights, but we are now on the verge of throwing that inheritance away. People all around the world aspire to enjoy the same rights. We should not let them down.

…And now over to TRISH

In an attempt to offer an alternative to TINA, I have put together this five-point alternative plan. I believe that something of this sort needs to be agreed upon by all groups who now stand opposed to the government (and IMF supported) programme of austerity measures. I would very much welcome any constructive comments, amendments, or corrections; and if you are interested in helping to take the idea further then do please get in touch.

The basic proposals can be summarised as follows: Take on the bankers, Re-regulate the markets, Increase tax revenues, Stop the wars, and Help for ourselves. Hence, TRISH:

Take on the bankers

The current crisis didn’t just happen for no reason. If it were simply a part of some kind of quasi-natural but ultimately mysterious boom and bust cycle, then we might hope to simply grit our teeth and ride it out. There is, unfortunately, no evidence that supports such a conviction.

The current crisis did not originate because of fiscal mismanagement and government overspending. The problems in Greece, for instance, did not arise simply because of their long-standing problems with tax receipts, any more than the recession in America began with subprime mortgages and the housing bubble. The individual crises of these various nation states are merely symptoms of more than two decades of unregulated greed and corruption in Wall Street and The City of London. The results of a systemic failure, which cannot be resolved therefore until the current financial system is itself overhauled.

The current crisis has happened because the speculators and financiers gathered so much power that they have taken control of our senior politicians. This is why Obama is surrounded by a coterie of advisers from Goldman Sachs. It is also why Peter Mandelson and George Osborne were found cosying up together aboard a Russian oligarch’s yacht at one of Nathan Rothschild’s lavish parties. For no dog can have two masters. To make sure they are working for us then, such obscene cronyism has to be rooted out, and, so far as it’s possible, legislated against.

Ever since the crash of 2008, the banks have been playing the suicide card. Holding us hostage with a gun pointed to their own heads. Give us your money or everything goes down with us, they threaten, and their close friends in the media and government play along, perpetuating the myth that they are simply “too big to fail”. They want us to forget about their malpractice and criminal fraud that caused the crisis, and to carry on stumping up the interest for debts so enormous they can never be repaid.

We need an investigation. We need an international debt moratorium followed by cancellation of all debt found to be odious. The endless bailouts only serve the bankers and these must end. Meanwhile private savings and pension funds need to be protected. But if Goldman Sachs closes down then so be it. We’ll pick up the pieces later.

Re-regulate the markets

This current crisis really owes its origins to the policies of Thatcher and Reagan. Everything would have been avoided if it hadn’t been for the deregulation of the markets which began back in the 1980s. Allowing the bankers to police themselves turned out to be a bad idea. We might have guessed.

The underlying cause of the current crisis is the worldwide trade in “derivatives”. It is currently estimated that in the order of a quadrillion US dollars (yes, that’s with a qu-) has been staked on derivations of various kinds. We can compare this with the entire world GDP which turns out to be a mere 60 trillion US dollars2. One quadrillion being more than twenty times larger. Or we might compare it against the estimated monetary wealth of the whole world: about $75 trillion in real estate, and a further $100 trillion in world stock and bonds. So one quadrillion is a number exceeding even the absolute monetary value of the entire world! Warren Buffett once described derivatives as “financial weapons of mass destruction”, and he should know because he trades in them.

We must place a ban, if not on all derivatives, then certainly on the most toxic varieties such as credit-default swaps. There should also be a criminal investigation that looks into the sale of so many “toxic assets” and considers the role of the credit ratings agencies which graded them triple-A. The very same rating agencies that are now downgrading countries such as Greece, Portugal and Ireland.

A separation of investment banking from depository banking would at least have protected ordinary savers from the whims of the speculators. In America such a separation had existed since the Banking Act of 1933, known as the Glass-Steagall Act, until Bill Clinton repealed the law in 1999. Legislation along the lines of Glass-Steagall needs to be brought back.

Increase tax revenues

Tax is a dirty word but if the deficit is to be redressed then government revenue will need to be increased. Politicians talk a great deal about fairness and we should hold them to this. The people who caused the crisis should now be bailing us out. There has been some talk of a Tobin tax on all transactions in the financial markets, and even at the very low rates of 0.05% being proposed by some groups, hundreds of billions of pounds would be raised annually. So why not levy a Tobin tax at a higher rate, say 1% (which is a tiny fraction when compared to any tax the rest of us pay) and then use that money to repay the national debt?

Gordon Brown came into office on the promise of closing tax loopholes but did nothing of the kind. Major corporations simply don’t pay their fair share. They move their operations offshore by taking advantage of the many tax havens available, the majority of which are British dependencies. It is estimated that tax havens drain the UK economy of around £25bn annually through their role in tax avoidance and evasion, and that hundreds of billions are lost globally each year.3 Money that should be paying for education and healthcare.

We should resist any rises in the sorts of stealth taxes on the poor and the middle class which the government are likely to propose, no matter how temptingly packaged they may appear. “Quantitative Easing”, which is a deliberately impressive and misleading term for what is simply the printing of extra money, is an inherently inflationary strategy. It is, therefore, the most insidious stealth tax of all. Let’s find the money in fairer ways, by forcing the corporations and the super-rich to pay their dues.

Stop the wars

Wars cost money, lots of money. Defence Secretary Liam Fox has recently revealed that the estimated cost for our involvement in the NATO-led Libya campaign will be in the region of £120m, assuming the conflict continues into the autumn as expected. A further £140m then being needed to replace missiles and munitions, which makes £260 million in total.4 However, less conservative estimates of costs to the British taxpayer raise the figure to as much as £1bn.5

Meanwhile, the wars in Afghanistan and Iraq have already cost British taxpayers more than £20billion, and this does not even include the salaries of soldiers or paying for their long-term injuries and mental health care.6 Acute care for the troops most seriously injured in Afghanistan is costing the government more than £500,000 every week.7 And all for what?

Putting an end to these imperialist adventures is not only a moral imperative, it is an economic necessity.

Help for ourselves and others

Running a nation’s economy is not the same as running a household budget. Making cuts in government spending may save money, but with reduced investment there must come an inevitable kick-back. The economy will shrink and with less tax revenue available the deficit then grows. And this becomes a vicious cycle.

In order to stop such a debt spiral turning into depression, the government needs to spend rather than save. This is what the post-war Attlee government did when it expanded the welfare state and founded the National Health Service. Reinvestment in public services and infrastructure can put money in people’s pockets again. Meanwhile, investment in manufacturing and industry would help to reduce our balance of payments deficit.

During times of depression government investment becomes essential. We need investment to revive Britain’s once strong manufacturing base. This can involve tax or other incentives and will most certainly require significant cash injections to support established industries and encourage new production and innovation. In the meantime, we should roll back the privatisation of our public sector, of schools and prisons (how outrageous that companies can profit from locking people up), and most urgently, of the NHS.

In a fully privatised world, which is the dream of neoliberal economists, we all fall prey to the markets. So let’s abandon our current obsession with private enterprise and move back to a more mixed-economy, adopting a policy of dirigisme. In this spirit, we might decide to take state control of any struggling key industries, as well as re-nationalising the natural monopolies of water and energy supply.

It is high time to rebuild our infrastructure, since this is the bedrock for all social and economic progress: and examples of the sorts of projects we should consider include the long overdue upgrading of our railway system; the installation of countrywide fibre-optic broadband; the construction of new power plants including the proposed tide power barrage across the Severn estuary, which alone could supply more than 5% of our current electricity demands; and then there are more ambitious schemes, such as protecting ourselves against future water shortages by building a national water grid. We need to seize this as an opportunity to do all the things we ought to have done years ago because the future will belong to those who invested wisely – which means funneling our money into rebuilding industry, reconstructing our infrastructure, and supporting new areas of scientific research and development instead of frittering it away on banker bailouts and bonuses. Let’s build a country that’s fit and proper for the twenty-first century.

Such a New Deal programme was how Franklin Roosevelt rescued the US economy during the last Great Depression. Between 1933 and 1936, Roosevelt implemented the “3 Rs”: Relief for the unemployed and poor, Recovery of the economy to normal levels, and Reform of the financial system to prevent a repeat depression. Roosevelt’s New Deal is perhaps the best example of the kind of forward-thinking programme of economic measures that is so desperately needed today.

Could it be that as this year’s Bilderberg conference ended, enactment of their undisclosed agenda was already about to begin in Greece? Or is it coincidence that only one day after Bilderberg concluded, Standard and Poor’s, the American credit rating agency, dropped Greece an unprecedented 3 full grades making it the least credit-worthy country in the entire world…yes, and that includes Albania, Mongolia and Zambia 1:

Speculation is certainly rife in Greece about why Giorgos Papaconstantinou, the Greek Finance Minister, had attended the annual Bilderberg gathering, and now it seems that his invidious task of revealing the terms for yet another “bail-out” package, so quickly following on from the last, and plunging Greece into even deeper debt, has been made much easier by S&P‘s announcement. Although, with the deal apparently struck by the banking troika (European Central Bank, The EU and the IMF) over a week ago, the details of this latest “bail-out” have still yet to be officially announced to the Greek public.

We might imagine the kind of meeting that took place between Papaconstantinou and his Bilderbuddies last weekend when asked why his government hadn’t announced the new loan deal at home:

Papaconstantinou: “But it’s really not a good time for mentioning another bail-out with all these people camping outside of the Parliament building for the last three weeks”.

And then the reply from a higher ranking Bilderboss: “Well, look Georgy, you’ve just got to convince them – twist their arms a little. Look, they’ve got to accept this deal… [pause] hey, I’ll have a word with some friends and maybe we’ll see a credit rating drop, then you can make them an offer they can’t refuse”.

Incidentally, Standard and Poor‘s are one arm of The McGraw-Hill Companies, Inc, which has its headquarters in the Rockefeller Center in New York City. Nice and handy then for the old boy David Rockefeller…

However, many of the Greek people are now starting to see past the media-driven narrative, increasingly aware of duplicity and fraud that has brought their country to the brink of financial ruin. A series of national strikes are already planned, which one can only hope will be backed up and supported by unions across the whole of Europe ––after all, we are all becoming victims of this same financial terrorism, the smaller economies being just a little further behind on the Corporatocracy road than others. Indeed, the UK itself provides a sorry example of how easy it has become to steal a country’s national assets, the drip, drip, drip of privatisation for the last thirty years, steadily shifting power from the people to the corporations.

Interestingly, one member of the Greek Parliament is already asking what Papaconstantinou discussed/decided at the Bilderberg meeting. Meanwhile, Swiss ministers are also reportedly chairing questions in their Parliament this week.

As for Standard and Poor’s, well they played a pivotal role in this current and ongoing crisis. Indeed, all three of the major credit rating agencies stand accused of instigating, whether by accident or design, the 2008 banking crisis, by giving triple-A rating to the kinds of “junk assets” that directly led to the current debt spiral:

Credit ratings of AAA (the highest rating available) were given to large portions of even the riskiest pools of loans. Investors, trusting the low risk profile that AAA implies, loaded up on these [collateralized debt obligations] CDOs that later became unsellable. Those that could be sold often took staggering losses. For instance, losses on $340.7 million worth of CDOs issued by Credit Suisse Group added up to about $125 million, despite being rated AAA by Standard & Poor’s.[6]

Companies pay Standard & Poor’s to rate their debt issues. As a result, some critics have contended that Standard & Poor’s is beholden to these issuers and that its ratings are not as objective as they should be.

But then it turns out that when Standard & Poor’s, Moody’s and Fitch were issuing credit ratings for “securities” in the lead up to the 2008 banking crisis, the grades were given merely on the basis of “opinions”, as the documentary film Inside Job makes abundantly clear:

Thus having helped to infect the world with “toxic assets”, S&P and the other agencies then attacked more directly by their lowering sovereign credit ratings (in Greece, Ireland and Portugal). According to wikipedia they have also meddled more directly:

In April 2009 Standard & Poor’s called for “new faces” in the Irish Government, which was seen as interfering in the democratic process. In a subsequent statement they said they were “misunderstood”.[7]

In all cases, the path of no return to truly independent sovereignty has been laid.

Before the first Greek bail-out package, you may recall Standard and Poor’s slowly lowered Greece’s credit rating before announcing the terms and conditions to the Greek people (even though we now know that Prime Minister Papandreou had previously sounded out the IMF about a loan). However, this time, no slow downgrading, a 3-point fall will do instead.

The latest “opinion” from Standard & Poor’s does, however, present the Greek finance minister with an answer to his critics. “What’s the choice?” he’ll say when he gets home, “How else will we ever pay off these debts?” Although, of course, the truth is that the bail-out is actually for the bankers not the country. Since in the long-term these bail-outs will solve nothing, merely postponing the inevitable default for a few more months and years. Meanwhile, it offers Papaconstantinou an excuse for further “austerity measures”, already so crippling to the real economy and to Greek society, whilst denying the kinds of “New Deal” investment that could actually stimulate an economic recovery.

Tomorrow morning will see the first 7 a.m. protest outside of the Greek parliament. The Greek people look set to fight on.

This message of support was written by greek gadfly.

Click here for further information on the protests taking place in Greece.